General Counsel Review:N/A

SUMMARY:The first quarter of Fiscal Year (FY) 2009-10
came to a conclusion on September 30, 2009.Bar graphs comparing budgeted and actual year-to-date revenues and
expenditures for the period are included as Exhibits 7-A and 7-B.Exhibit 7-C
presents the same information in a table format.The following comments summarize District
staff's observations:

REVENUES

The revenues
graph compares amounts received through the first quarter of FY 2009-10 to the
amounts budgeted for that same time period.Total revenues collected were $684,159, or 34% of the budgeted amount of
$1,988,400.Variances within the
individual revenue categories are described below:

Administrative permit fee revenues totaled $86,177,
or about 125% of the amount budgeted for the period.

Connection charge revenues amounted to $280,107,
which is approximately 280% of the budgeted amount.The higher than expected receipts were due
to fees collected in September for the SeasideCityCenter development.

Interest revenues were $416, or only 4% of the budget
for the period.This is due to low
interest rates and because interest payments from the Local Agency
Investment Fund are not received until after the end of each quarter.

User fee revenues were $289,332, or about 31% of the
amount budgeted.This is below
budget because only one month’s user fees were received during the period.

No property tax revenues were received during the
quarter because they are received from the County of Monterey
on a semi-annual basis in December and April of each FY.

Project reimbursements of $15,775 were considerably
less than the budgeted amount as is typically the case early in each FY.

The “Other” revenue category totaled $12,352 or about
5% of the budgeted amount.This is
well below budget because this category includes potential use of reserves
during the FY.

EXPENDITURES

Expenditure
activity as depicted on the expenditure graph is similar to patterns seen in
past fiscal years.Total expenditures of
$1,198,217 were about 60% of the budgeted amount of $1,988,400 for the period.Variances within the individual expenditure
categories are described below:

Personnel costs of $796,540 were about 98% of the budget
for the period.

Expenditures for supplies and services were $125,010,
or about 53% of the budgeted amount.

Capital assets purchases of $11,922 represented around
31% of the budgeted amount.Capital
purchases typically occur sporadically throughout each FY.

Funds spent for project expenditures were $255,690,
or approximately 30% of the amount budgeted for the period.This is similar to trends in previous
FYs.

There were expenditures of $9,055 from the Contingencies/Reserves
category during the period. This is
about 15% of the amount budgeted for the period.